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in the name of the Prime Minister to EXCO at its next meeting on

6 June.

5. We have pointed out that it would not be possible to provide a substantive response to the appeal in advance of the OD meeting on 3 June. We asked him to consider holding the position at the 6 June meeting by saying that EXCO's views had been reported to Ministers D and a response was awaited. The Governor has however advised that

he would much prefer an interim response expressing sympathy for

Hong Kong's difficulties and indicating areas in which we were

seeking remedies or had already decided to help.

6. The arguments for and against a message at this stage are

finely balanced. But recent developments have tipped the scales

clearly in favour. I confirmed with the Governor by telephone earlier today that this remains his view. In particular:

7.

(a)

arrivals have continued to come at an appallingly high

rate;

(b) the situation in the detention centres is deteriorating:

5,000 Boat People are now on hunger strike in protest

against the screening procedures.

(c)

It is clear from all the indications we have received from

the Governor that he is facing a very serious political

situation indeed. A message of sympathy and support from

the Government at this stage would be timely.

The Governor himself will be in London next week. In these

circumstances, a suitable message could be read out to EXCO by the

Chief Secretary on the Governor's behalf.

8.

There is clearly nothing that can be said about a holding centre

in the UK: if ExCo ask about this the Chief Secretary would have to

make it clear that this is a non starter. But the Prime Minister's

and Secretary of State's talks with President Bush and Mr Baker

(widely reported in Hong Kong) provide one helpful element in the

message. We can also capitalise on our decision to provide tents.

CONFIDENTIAL

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